Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change To Temporarily Suspend the Requirements of ISE Rule 306 and Related ISE Rules Concerning the Approval of New Members of the Exchange, 34436-34438 [2012-14071]
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34436
Federal Register / Vol. 77, No. 112 / Monday, June 11, 2012 / Notices
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–BATS–2012–022. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–BATS–
2012–022 and should be submitted on
or before July 2, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–14072 Filed 6–8–12; 8:45 am]
srobinson on DSK4SPTVN1PROD with NOTICES
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67131; File No. SR–ISE–
2012–51]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing of Proposed Rule
Change To Temporarily Suspend the
Requirements of ISE Rule 306 and
Related ISE Rules Concerning the
Approval of New Members of the
Exchange
June 5, 2012.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 5,
2012, the International Securities
Exchange, LLC (the ‘‘Exchange’’ or the
‘‘ISE’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I and II below, which items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to temporarily
suspend the requirements of ISE Rule
306 and related ISE rules concerning
approval of new member organizations
in order to approve Apex Clearing
Corporation, f/k/a Ridge Clearing and
Outsourcing Solutions, Inc. (‘‘Apex
Clearing’’) as an ISE member
organization, subject to Apex Clearing
complying with Exchange rules for a
new member organization within 30
calendar days of the date that Apex
Clearing is provisionally approved as an
ISE member organization. The Exchange
is also proposing to accept Apex
Clearing’s assumption of all of the
existing clearing agreements and
arrangements currently in effect
between Penson Financial Services Inc.
(‘‘PFSI’’) and various other ISE member
organizations by execution of a global
agreement thereto.
The text of the proposed rule change
is available on the Exchange’s Internet
Web site at https://www.ise.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
1 15
16 17
CFR 200.30–3(a)(12).
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20:21 Jun 08, 2012
2 17
Jkt 226001
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00100
Fmt 4703
Sfmt 4703
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization has
prepared summaries, set forth in
sections A, B and C below, of the most
significant aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes this rule filing
to temporarily suspend the
requirements of ISE Rule 306 and
related rules regarding the approval of
Members of the Exchange in order to
immediately approve Apex Clearing as
an ISE Member. The Exchange proposes
this temporary suspension on an
emergency basis to ensure that Apex
Clearing can continue the clearing
operations of PFSI without unnecessary
disruption, which could have a
significant collateral impact to a number
of other Members. The proposed
temporary suspension is contingent
upon Apex having complied with all
new Member Exchange rules within 30
calendar days of the date Apex is
provisionally approved as an ISE
Member pursuant to this filing.
On May 31, 2012, Apex Clearing
Holdings, LLC (‘‘Apex Holdings’’), Apex
Clearing Solutions, LLC, Broadridge
Financial Solutions, Inc. (‘‘Broadridge’’),
PFSI and Penson Worldwide, Inc.
(‘‘PWI’’) (together, the ‘‘Parties’’)
consummated a transaction resulting in
a change in ownership of Apex
Clearing.3 Broadridge, Apex Holdings,
PWI and PFSI each made capital
investments in Apex Holdings, the
holding company parent of Apex
Clearing. PFSI also assigned all of its
U.S. clearing contracts and all customer
and introducing broker proprietary
accounts along with key personnel to
3 Prior to the Transaction, Apex Clearing’s name
was Ridge Clearing & Outsourcing Solutions, Inc.
Prior to the transaction, Ridge Clearing &
Outsourcing Solutions, Inc. contributed its
outsourcing operations and all associated personnel
and systems to its affiliated entity, Broadridge
Securities Processing Solutions, LLC (‘‘BSPS’’)
where it will continue to provide operations
support and outsourcing services to a number of
broker-dealers, including Apex Clearing.
E:\FR\FM\11JNN1.SGM
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srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 112 / Monday, June 11, 2012 / Notices
Apex Clearing (the ‘‘Transferring
Accounts’’).4
As a result of the transaction, Apex
Clearing, which is not an ISE member
organization, will provide the clearing
services currently provided to the
Transferring Accounts by PFSI. On May
31, 2012, Apex Clearing submitted an
application for approval as an ISE
Member. However, because of the
expedited nature of the transaction,
Apex Clearing was unable to fully
comply with ISE Rule 306 and related
new Member rules. Because of the need
for seamless continuity with respect to
the Transferring Accounts, Apex
Clearing has requested that the
Exchange temporarily suspend its new
membership rules in order to enable
Apex Clearing’s approval as a Member
on an expedited basis. Pursuant to its
request, Apex Clearing will fully
comply with the Exchange’s new
member requirements within 30
calendar days of provisional approval.
ISE Rule 306 requires any person who
proposes to apply to become a Member
of the Exchange to file an application
with the Exchange submit such
information as may be required by the
application and related ISE rules. When
a corporate acquisition concerns an
asset transfer only, and not an
acquisition of the corporate entity, ISE
membership status cannot be transferred
to the acquiring entity. The entity that
proposes to continue acquired business
operations of an ISE Member must be
separately approved as an ISE Member.
Among other things, to be approved
as an ISE Member, the applicant must:
• File with the Exchange an
application and all documents
requested therein pursuant to ISE Rule
306.
• Ensure that all persons associated
with the applicant who meet the
requirements of persons associated with
Members under ISE Rule 304, consent to
ISE jurisdiction as a Member or
associated person.
• Submit to the Exchange partnership
or corporate documents as may be
applicable including certificate of
incorporation, by-laws, and other
corporate documents pursuant to ISE
Rule 305.
In addition, the Exchange reviews
whether the applicant meets federal and
ISE capital requirements and whether it
has adopted controls and procedures to
comply with Exchange rules.
Due to the amount of information an
applicant is required to provide and
have completed prior to being approved
as a Member, the Member approval
4 See Penson Worldwide, Inc. Form 8–K dated
May 31, 2012.
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20:21 Jun 08, 2012
Jkt 226001
process generally takes several weeks to
complete. The length of time varies
based on the timing of the applicant’s
response to requests for information and
documentation.
As proposed, Apex Clearing will
continue the clearing and certain other
operations of PFSI as of June 6, 2012. In
order to avoid interruption of the
services PFSI currently provides to
other Exchange Members, the ISE
believes that Apex Clearing should be
approved immediately as an ISE
Member. The Exchange notes that Apex
Clearing is already a registered broker
dealer, a FINRA member and an OCC
clearing member, which is a
prerequisite for becoming an ISE
member organization that is approved to
clear transactions executed on the
Exchange.
The Exchange therefore proposes
providing Apex Clearing with a
temporary suspension of ISE Rule 306
and related membership rules as they
relate to approval to operate an ISE
Member and approval of a proposed
Member’s associated persons, and
immediately approve Apex Clearing as
a Member. As proposed this temporary
suspension is contingent upon:
• Apex Clearing providing the
Exchange with sufficient information to
confirm that Apex Clearing will meet its
capital requirements as an ISE Member;
and
• Within 30 calendar days of Apex
Clearing’s approval as an ISE Member
under this proposed filing, Apex
Clearing and its approved persons will
have complied with the Exchange’s new
member organization requirements as
set forth in ISE Rules 304–306.
As proposed, if Apex Clearing does
not comply with all applicable ISE
member organization application
requirements within 30 calendar days of
the effective date of this filing, its status
as an approved ISE Member will no
longer be effective.
In addition, the Exchange proposes to
permit Apex Clearing to assume all
existing clearing agreements and
arrangements currently in effect with
other ISE Members by execution of
global agreements thereto. Notice of
such assumption will be provided to
impacted Members via email.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with Section
6(b) 5 of the Act, in general, and furthers
the objectives of Section 6(b)(5) 6 in
particular in that it is designed to
promote just and equitable principles of
5 15
6 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00101
Fmt 4703
trade, to prevent fraudulent and
manipulative acts, to remove
impediments to and to perfect the
mechanism for a free and open market
and a national market system and, in
general, to protect investors and the
public interest. The Exchange believes
that permitting the expeditious approval
of Apex Clearing as an ISE Member will
avoid interruption of the services PFSI
currently provides to other Exchange
Members. Based on information and
representations provided by Apex
Clearing, a temporary suspension of
certain ISE membership rules is needed
based on the expedited nature of the
transaction to enable seamless
continuity with respect to the
transferring accounts. Consequently, the
ISE believes that temporary suspension
of its Member requirements so that
Apex Clearing can be approved
immediately as an ISE Member will
help to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities and
is consistent with the Act.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any
unsolicited written comments from
members or other interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 7 and Rule
19b–4(f)(6) thereunder.8 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
7 15
8 17
Sfmt 4703
34437
E:\FR\FM\11JNN1.SGM
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
11JNN1
34438
Federal Register / Vol. 77, No. 112 / Monday, June 11, 2012 / Notices
of the Act 9 and Rule 19b–4(f)(6)(iii)
thereunder.10
A proposed rule change filed under
Rule 19b–4(f)(6) 11 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),12 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest.
The Exchange has asked the
Commission to waive the five-day prefiling requirement and the 30-day
operative delay so that the proposed
rule change may become operative
immediately upon filing. The
Commission notes that the Exchange is
proposing that certain of its rules
relating to membership requirements be
temporarily suspended so that Apex
Clearing can be provisionally approved
as an ISE Member. The proposed relief
does not exempt Apex Clearing from
Exchange rule requirements governing
Members. Apex Clearing would have a
30 calendar day grace period within
which to apply for and be approved
under relevant Exchange rules.
Moreover, the Commission believes that
waiver of the 30-day operative delay is
appropriate to ensure a smooth
transition of PFSI operations to Apex
Clearing. In particular, given the
rapidity with which events have
developed, waiver of the 30-day
operative delay is necessary to avoid
significant disruption to PFSI’s existing
customers and the market generally.
Therefore, the Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest and
designates the proposed rule change as
operative upon filing.13
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) requires a self-regulatory
organization to give the Commission written notice
of its intent to file the proposed rule change at least
five business days prior to the date of filing of the
proposed rule change, or such shorter time as
designated by the Commission. The Commission is
waiving this five-day pre-filing requirement.
11 17 CFR 240.19b–4(f)(6).
12 17 CFR 240.19b–4(f)(6)(iii).
13 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
srobinson on DSK4SPTVN1PROD with NOTICES
10 17
VerDate Mar<15>2010
20:21 Jun 08, 2012
Jkt 226001
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–14071 Filed 6–8–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–67130; File No. SR–BOX–
2012–006]
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–ISE–2012–51 on the subject
line.
Self-Regulatory Organizations; BOX
Options Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To
Temporarily Suspend Certain
Exchange Rules Concerning Approval
of a New Options Participant
Paper Comments
June 5, 2012.
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–ISE–2012–51. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–ISE–
2012–51 and should be submitted on or
before July 2, 2012.
PO 00000
Frm 00102
Fmt 4703
Sfmt 4703
Pursuant to Section 19(b)(1) under the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 5,
2012, BOX Options Exchange LLC (the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange filed the
proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act,3 and
Rule 19b–4(f)(6) thereunder,4 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
BOX Options Exchange LLC (the
‘‘Exchange’’) is proposing to temporarily
suspend the requirements of Exchange
Rule 2050 and related Exchange rules
concerning the approval of new Options
Participants in order to approve Apex
Clearing Corporation, f/k/a Ridge
Clearing and Outsourcing Solutions,
Inc. (‘‘Apex Clearing’’) as an Options
Participant on BOX Market LLC, an
options trading facility of the Exchange
(‘‘BOX’’), subject to Apex Clearing
complying with Exchange rules for a
new Options Participant within 30
calendar days of the date that Apex
Clearing is provisionally approved as an
Options Participant. The Exchange is
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
1 15
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]]>Agencies
[Federal Register Volume 77, Number 112 (Monday, June 11, 2012)]
[Notices]
[Pages 34436-34438]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14071]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67131; File No. SR-ISE-2012-51]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing of Proposed Rule Change To Temporarily Suspend
the Requirements of ISE Rule 306 and Related ISE Rules Concerning the
Approval of New Members of the Exchange
June 5, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on June 5, 2012, the International Securities Exchange, LLC (the
``Exchange'' or the ``ISE'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I and II below, which items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to temporarily suspend the requirements of
ISE Rule 306 and related ISE rules concerning approval of new member
organizations in order to approve Apex Clearing Corporation, f/k/a
Ridge Clearing and Outsourcing Solutions, Inc. (``Apex Clearing'') as
an ISE member organization, subject to Apex Clearing complying with
Exchange rules for a new member organization within 30 calendar days of
the date that Apex Clearing is provisionally approved as an ISE member
organization. The Exchange is also proposing to accept Apex Clearing's
assumption of all of the existing clearing agreements and arrangements
currently in effect between Penson Financial Services Inc. (``PFSI'')
and various other ISE member organizations by execution of a global
agreement thereto.
The text of the proposed rule change is available on the Exchange's
Internet Web site at https://www.ise.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in sections A, B and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes this rule filing to temporarily suspend the
requirements of ISE Rule 306 and related rules regarding the approval
of Members of the Exchange in order to immediately approve Apex
Clearing as an ISE Member. The Exchange proposes this temporary
suspension on an emergency basis to ensure that Apex Clearing can
continue the clearing operations of PFSI without unnecessary
disruption, which could have a significant collateral impact to a
number of other Members. The proposed temporary suspension is
contingent upon Apex having complied with all new Member Exchange rules
within 30 calendar days of the date Apex is provisionally approved as
an ISE Member pursuant to this filing.
On May 31, 2012, Apex Clearing Holdings, LLC (``Apex Holdings''),
Apex Clearing Solutions, LLC, Broadridge Financial Solutions, Inc.
(``Broadridge''), PFSI and Penson Worldwide, Inc. (``PWI'') (together,
the ``Parties'') consummated a transaction resulting in a change in
ownership of Apex Clearing.\3\ Broadridge, Apex Holdings, PWI and PFSI
each made capital investments in Apex Holdings, the holding company
parent of Apex Clearing. PFSI also assigned all of its U.S. clearing
contracts and all customer and introducing broker proprietary accounts
along with key personnel to
[[Page 34437]]
Apex Clearing (the ``Transferring Accounts'').\4\
---------------------------------------------------------------------------
\3\ Prior to the Transaction, Apex Clearing's name was Ridge
Clearing & Outsourcing Solutions, Inc. Prior to the transaction,
Ridge Clearing & Outsourcing Solutions, Inc. contributed its
outsourcing operations and all associated personnel and systems to
its affiliated entity, Broadridge Securities Processing Solutions,
LLC (``BSPS'') where it will continue to provide operations support
and outsourcing services to a number of broker-dealers, including
Apex Clearing.
\4\ See Penson Worldwide, Inc. Form 8-K dated May 31, 2012.
---------------------------------------------------------------------------
As a result of the transaction, Apex Clearing, which is not an ISE
member organization, will provide the clearing services currently
provided to the Transferring Accounts by PFSI. On May 31, 2012, Apex
Clearing submitted an application for approval as an ISE Member.
However, because of the expedited nature of the transaction, Apex
Clearing was unable to fully comply with ISE Rule 306 and related new
Member rules. Because of the need for seamless continuity with respect
to the Transferring Accounts, Apex Clearing has requested that the
Exchange temporarily suspend its new membership rules in order to
enable Apex Clearing's approval as a Member on an expedited basis.
Pursuant to its request, Apex Clearing will fully comply with the
Exchange's new member requirements within 30 calendar days of
provisional approval.
ISE Rule 306 requires any person who proposes to apply to become a
Member of the Exchange to file an application with the Exchange submit
such information as may be required by the application and related ISE
rules. When a corporate acquisition concerns an asset transfer only,
and not an acquisition of the corporate entity, ISE membership status
cannot be transferred to the acquiring entity. The entity that proposes
to continue acquired business operations of an ISE Member must be
separately approved as an ISE Member.
Among other things, to be approved as an ISE Member, the applicant
must:
File with the Exchange an application and all documents
requested therein pursuant to ISE Rule 306.
Ensure that all persons associated with the applicant who
meet the requirements of persons associated with Members under ISE Rule
304, consent to ISE jurisdiction as a Member or associated person.
Submit to the Exchange partnership or corporate documents
as may be applicable including certificate of incorporation, by-laws,
and other corporate documents pursuant to ISE Rule 305.
In addition, the Exchange reviews whether the applicant meets
federal and ISE capital requirements and whether it has adopted
controls and procedures to comply with Exchange rules.
Due to the amount of information an applicant is required to
provide and have completed prior to being approved as a Member, the
Member approval process generally takes several weeks to complete. The
length of time varies based on the timing of the applicant's response
to requests for information and documentation.
As proposed, Apex Clearing will continue the clearing and certain
other operations of PFSI as of June 6, 2012. In order to avoid
interruption of the services PFSI currently provides to other Exchange
Members, the ISE believes that Apex Clearing should be approved
immediately as an ISE Member. The Exchange notes that Apex Clearing is
already a registered broker dealer, a FINRA member and an OCC clearing
member, which is a prerequisite for becoming an ISE member organization
that is approved to clear transactions executed on the Exchange.
The Exchange therefore proposes providing Apex Clearing with a
temporary suspension of ISE Rule 306 and related membership rules as
they relate to approval to operate an ISE Member and approval of a
proposed Member's associated persons, and immediately approve Apex
Clearing as a Member. As proposed this temporary suspension is
contingent upon:
Apex Clearing providing the Exchange with sufficient
information to confirm that Apex Clearing will meet its capital
requirements as an ISE Member; and
Within 30 calendar days of Apex Clearing's approval as an
ISE Member under this proposed filing, Apex Clearing and its approved
persons will have complied with the Exchange's new member organization
requirements as set forth in ISE Rules 304-306.
As proposed, if Apex Clearing does not comply with all applicable
ISE member organization application requirements within 30 calendar
days of the effective date of this filing, its status as an approved
ISE Member will no longer be effective.
In addition, the Exchange proposes to permit Apex Clearing to
assume all existing clearing agreements and arrangements currently in
effect with other ISE Members by execution of global agreements
thereto. Notice of such assumption will be provided to impacted Members
via email.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) \5\ of the Act, in general, and furthers the objectives of
Section 6(b)(5) \6\ in particular in that it is designed to promote
just and equitable principles of trade, to prevent fraudulent and
manipulative acts, to remove impediments to and to perfect the
mechanism for a free and open market and a national market system and,
in general, to protect investors and the public interest. The Exchange
believes that permitting the expeditious approval of Apex Clearing as
an ISE Member will avoid interruption of the services PFSI currently
provides to other Exchange Members. Based on information and
representations provided by Apex Clearing, a temporary suspension of
certain ISE membership rules is needed based on the expedited nature of
the transaction to enable seamless continuity with respect to the
transferring accounts. Consequently, the ISE believes that temporary
suspension of its Member requirements so that Apex Clearing can be
approved immediately as an ISE Member will help to foster cooperation
and coordination with persons engaged in facilitating transactions in
securities and is consistent with the Act.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
[[Page 34438]]
of the Act \9\ and Rule 19b-4(f)(6)(iii) thereunder.\10\
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\7\ 15 U.S.C. 78s(b)(3)(A)(iii).
\8\ 17 CFR 240.19b-4(f)(6).
\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires a self-regulatory organization to give the
Commission written notice of its intent to file the proposed rule
change at least five business days prior to the date of filing of
the proposed rule change, or such shorter time as designated by the
Commission. The Commission is waiving this five-day pre-filing
requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
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The Exchange has asked the Commission to waive the five-day pre-
filing requirement and the 30-day operative delay so that the proposed
rule change may become operative immediately upon filing. The
Commission notes that the Exchange is proposing that certain of its
rules relating to membership requirements be temporarily suspended so
that Apex Clearing can be provisionally approved as an ISE Member. The
proposed relief does not exempt Apex Clearing from Exchange rule
requirements governing Members. Apex Clearing would have a 30 calendar
day grace period within which to apply for and be approved under
relevant Exchange rules. Moreover, the Commission believes that waiver
of the 30-day operative delay is appropriate to ensure a smooth
transition of PFSI operations to Apex Clearing. In particular, given
the rapidity with which events have developed, waiver of the 30-day
operative delay is necessary to avoid significant disruption to PFSI's
existing customers and the market generally. Therefore, the Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest and designates the
proposed rule change as operative upon filing.\13\
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\13\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-ISE-2012-51 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-ISE-2012-51. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-ISE-2012-51 and should be
submitted on or before July 2, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-14071 Filed 6-8-12; 8:45 am]
BILLING CODE 8011-01-P
